A talk shop is in no position to lecture Hong Kong

The city is one of the most innovative economies and has been since birth, yet the World Economic Forum insists we need to up our game

Jake van der Kamp

BIO

Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

Hong Kong must improve innovation and higher education if it is to enhance its global competitiveness, the Geneva-based World Economic Forum warned …

SCMP, September 5

Let's get the proper perspective on the World Economic Forum first. The WEF is a German professor by the name of Klaus Schwab, who set it up as a talk shop in 1971 and is still its executive chairman.

The WEF is best known for the gale of hot air it generates every January at its annual meeting in the Swiss ski resort of Davos. It is a namedroppers' must gathering. Gordon Brown, who was then prime minister of Britain, talked to Queen Rania of Jordan there in 2008. Fact. And the then-prime minister of Japan, Naoto Kan, delivered a special message there in 2011. He really did.

Hong Kong has always faced the big challenge of innovation. Find something new or wither away

The WEF has a motto - "Entrepreneurship in the global public interest". It also has another motto - "Committed to improving the state of the world". The theme of this year's talk shop was "Resilient Dynamism", as Prof Schwab has ordained that "The need for global co-operation has never been greater."

You get the picture, I'm sure - blowhards at every turn with the conventional economic thinking of the day expressed in the finest jargon that the shills can devise.

But even these people have to recognise that pure hot air, wonderful as it no doubt is, perhaps is not quite enough. Solution: get up a survey, global of course, and now we can lecture every country in turn on what it must do to meet the righteous standards of the Davos talk shop. Listen, Hong Kong, you need more innovation.

Let's get our record on innovation straight for the benefit of these Davos blah-blah merchants. This is one of the most innovative economies in the entire world and has been so from inception. It has been so because it has had to be so.

Hong Kong has grown wealthy by doing whatever China cannot or will not do. When the mainland can and will do it, then Hong Kong has to find something new again. This started right from the moment Britain stole the place by armed robbery for the purpose of drug trafficking. China officially frowned on opium. Hong Kong therefore thrived on it.

This changed, of course, and every time it changed, Hong Kong faced the big challenge of innovation. Find something new or wither away. Every time, the challenge was met. Over the last 50 years alone, a huge garment business arose out of virtually nothing and, when China took that business to itself, a wrenching adjustment changed the emphasis of our economy to a huge services base instead. That was brains and a fierce spirit of innovation at work.

In contrast, when has Switzerland ever changed its economic mix of chocolates, poisonous chemicals and banking? Adam and Eve were still walking the earth, I believe. Who really has the credentials to lecture whom on innovation?

The problem here, of course, is that the WEF has a narrow definition of innovation. What it means by the term is fancy digital devices and everything that goes into making them.

We tried that in Hong Kong in the early to mid-1980s and wisely rejected it. I say this with some authority, as I was an investment analyst at the time, covering what I thought would be a hi-tech industrial emergence.

What I actually discovered was a high-risk, low-margin sector that confused illusion and real prospects. What you need to make hi-tech work is a big established market, a vast pool of underpaid labour, muscle to fight off the patent trolls, a critical mass of support industries and a government willing to throw away taxpayers' money on you.

We only ever had (and, unfortunately, still have) the last of these. Hong Kong is simply not a good place to do hi-tech design or manufacture. But it's a great place to do financing, insuring, shipping and trading of hi-tech, all of which requires considerable innovation.

Our government will listen to the Davos nonsense, of course, and waste even more money on trying to make this town what it can never be. We can't stop that.